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Egyptian businesses struggle as costs soar

In a once bustling Cairo shopping street, many businesses have now shut down or are operating at reduced opening hours.

Sitting outside their shops, owners complain that soaring living costs have resulted in fewer customers and less spending.

In June, Egypt hiked fuel prices by 50 percent to help meet the terms of a $12 billion International Monetary Fund (IMF) loan deal.

No, business here is very slow, there is no selling at all. Like before there was work and movement and stuff, but now there is nothing at all.

This was a sharper rise than expected by many Egyptians already struggling with inflation.

The fuel price rise has affected businesses and customers alike as transportation costs of basic and luxury goods increased causing a hike in prices and less spending.

“No, business here is very slow, there is no selling at all. Like before there was work and movement and stuff, but now there is nothing at all. Now we are barely able to cover our costs,” A nut shop owner, Walid Mohamed said.

Government officials say spending cuts will help revive an economy where subsidies have accounted for about a quarter of state expenditures.

But austerity carries risks for President Abdel Fattah al-Sisi as inflation and a contested deal to hand two Red Sea islands to Saudi Arabia have eroded his public standing.

Magdi Hosni, who owns a fish shop, said that Sisi’s measures were too harsh and sudden.

“The decisions that have been taken should have been carried out over many years. But he gave them out to us all at once. And this shouldn’t be done. We understand that this is economic reform. And it needs to be done but it should have been taken in several stages. It can’t be done all at once,” Hosni added.

Egypt has been struggling since a 2011 uprising drove foreign investors and tourists away.

Many Egyptians have been hit hard by record inflation and a local currency that has lost half its value since it was floated in November.